The trade publication notes that Columbia, Fidelity, Franklin
Templeton, Janus and Legg Mason, all big stock mutual fund players, are
working on active ETFs. Columbia has even filed for active stock ETFs. And
InvestmentNews also notes the success of Pimco's ETF version of Bill Gross'
flagship mutual fund. The active ETF version of Gross' fund is about one-third cheaper
than the original mutual fund.

"If active stock ETFs had similarly lower fees, it could make a big difference in
performance," Kephart writes. "With fee cuts similar to Pimco's, the average active stock
ETF could charge somewhere in the range of 80 basis points. With those cuts, a number of
active managers would have generated benchmark-beating performance last year."

Yet the article does not mention why ETF fees are often lower than mutual fund fees. When
buying a stock or ETF, but not when buying a regular mutual fund, investors have to pay a
trading fee, and thanks to the bid-ask spread the share price they buy or sell at may not
be as favorable as they hoped. And while investors can buy mutual funds, directly or
through intermediaries, and have the mutual fund fees pay for the account that holds
their shares, ETFs separate out those costs, too. Just like when buying stocks, investors
often have to pay for the account that holds their ETFs.&nbsp